How is property divided in a divorce?

who gets the engagement ring in divorce

Whether you owned a house, investments, jewelry, the engagement and wedding rings, real estate, vehicles, furniture or even a pet together with your husband or wife, when you breakup, these assets must be divided.

Who gets what in a divorce?

Divorce law varies by state, and every divorce differs. If you wonder who will get what when you and your spouse break up, the answer will depend on many factors, including where you live, how long you were married, and what each of you brought to the marriage in terms of property.

Most of these questions should be addressed with your divorce attorney or mediator.

Learn how much your engagement or wedding ring is worth for free, immediately >>

However, if you have an uncontested divorce, in which you and your soon-to-be ex amicably agree to most of the terms of the split, do not have complicated finances and agree on how time will be shared with any children you have, then you may use a DIY divorce service like CompleteCase.

Read our CompleteCase review here>>

Even so, you may have questions about how property and debt are divided in a divorce. Here are some guidelines for what you can expect.

What is the difference between community property and equitable distribution?

First, understand that there are two main types of property distribution in the United States

The way that property is divided in a divorce largely comes down to where you live. States are either a community property state or an equitable distribution state.

What is considered marital property in a divorce?

In community property states, spouses own everything equally, or property is owned solely by one spouse. 

Presently, there are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. 

What is equitable distribution? 

In equitable distribution states, property is divided fairly, not necessarily 50/50. One spouse may receive more in the divorce, while the other may be ordered by the court to give up property. This can be influenced by how much each party earns, how much they contributed financially to the marriage, inheritances, earning potential, length of marriage and other factors.

Are you in New York City or New York state? What to know about divorcing in NY.

Marital property vs separate property—what is the difference?

In short: Marital property is anything that is jointly owned by a couple, while separate property is owned only by one person.

What is marital property? Marital property definition.

Marital property consists of possessions spouses obtain during marriage. Assets and debts are marital property. Marital property includes earnings, everything bought with those earnings, and all debts incurred during the marriage.

Marital assets can include:

  • Cars
  • RVs
  • Houses and homes
  • Pensions and benefits
  • Investments, stocks, brokerage accounts
  • Retirement accounts
  • Clothing
  • Furniture
  • Businesses
  • Pets

Marital debt can include:

  • Mortgages and home lines of equity
  • Student loan debt
  • Personal loans—including to family members or friends
  • Credit card debt
  • Auto loans
  • Business loans
  • Medical debt

Note: Both marital assets and marital debt are both considered marital property.

What is non-marital property / separate property?

Non-marital property is personal or separate property. It includes inheritance, gifts, compensation from personal injury, property bought using personal funds, and proceeds of a pension vested before the start of a marriage. A business started before marriage is personal property, but if it increases in value during the marriage, or if the other spouse works at the business, a portion of it may become marital property.

Investment assets, including 401(k) and IRAs, real estate holdings, savings accounts and other assets acquired before the marriage are considered non-marital /separate property. But any contributions to investment funds made during the marriage are likely considered joint property— no matter who earned that money.

Is jewelry considered marital property?

A common divorce question is:

“Is an engagement ring considered marital property or personal property? What about wedding rings?”

Is jewelry considered marital property?

[Why you should sell your engagement ring after divorce—and where to do it safely, quickly and for the most cash]

They’re classified as gifts given before the start of the marriage. However, if a ring is a family heirloom, some courts may order the receiving spouse to return it to its original owner.

Jewelry is marital property if purchased during the marriage. If the jewelry in question was a gift or a form of inheritance, it’s separate property and not divisible. Jewelry acquired before marriage is also separate property.

Gifts between spouses during marriage are marital property and must be accounted for unless the spouse who gave the gift explicitly states the gift is the separate property of the receiving spouse. 

Are separate bank accounts consider marital property?

Separate bank accounts can be marital or personal property, depending on when they were opened and if marital funds were deposited in them. If a bank account was created during the marriage, then it’s marital property unless it solely consists of inheritance, gift, or award from a personal injury settlement, suit or benefit. 

If the bank account was created before the marriage, then it’s marital property if wages or marital funds have since been added to it. Otherwise, it’s separate property (keep reading for an explanation of ‘separate property’).

[37 reasons every woman needs $1,000 in her own savings account, and how to save it and where to get the most interest]

If someone  buys real estate for their spouse solely in the receiving spouse’s name, that property can likely be considered separate, and the owner is the spouse who received the home as a gift. However, legitimate disputes could still arise if there’s a question of whether marital funds were used for the purchase. 

Are assets always split 50-50?

In community property states, theoretically, the answer is yes—assets acquired during the term of the marriage are split 50-50. 

In practice, marital property cannot always be divided exactly 50/50. Typically, spouses and attorneys and sometimes judges work together to divide the property in a way that complies with standard practices in that jurisdiction, as well as — hopefully — is fair and reasonable. Spouses may still also maintain some personal property. 

Typically, all the couple's marital assets are listed, and a dollar value assigned to each. Some of this money may be tied up in a retirement account, which would require tax penalties should it be withdrawn, and other assets are in the form of equity in a house, which can be hard to withdraw without selling the home.

In these cases, the goal is for each party to receive in the divorce equitable assets, which may mean one spouse keeps a larger share of a retirement account, while the other keeps rights to the marital home.

In equitable distribution states, the court divides marital property in whichever way it sees as fair, not necessarily equal. 

Is the wife entitled to half of everything in divorce?

In community property states, each spouse gets half of all assets, regardless of who earned the money.

Other considerations in a divorce include income going forward. This is typically paid out through alimony and/or child support, depending on the income of each spouse, custody sharing of the children, and earning potential of the husband and wife.

Increasingly, as equally shared co-parenting is more common, and women earn more and the pay gap shrinks, more women are paying child support and alimony.

Also more common today is arrangements in which parents split time with the kids 50-50 and each are financially responsible for themselves.

Who gets the house in a divorce?

Aside from situations where one spouse pays for the house before marriage and keeps it after, specific marital circumstances, including children and finances, usually dictate the fate of the couple’s home.

Here are some common scenarios about what happens to the couple's home in the divorce:

  • One spouse buys out the other's share of the home's equity
  • If the house is underwater—in which the mortgage is larger than the value of the home—then the house may be sold, and the remaining debt split between the spouses
  • If they can afford it, the couple may choose for one parent to stay in the home to maintain a routine and school district for any children they have together
  • Continue to co-own the home. You can then rent out the property and share any profits, ride out an economic downturn to hope to recoup any losses or increase profits in a future sale, or one of the spouses can continue to live in the home, with an agreement about how any sale proceeds would be divided in the future.

If you choose to refinance the home in order to buy out your ex, Credible will get you pre-qualified in 3 minutes, provides offers shortly after, and allows you to upload all documents online. Get prequalified for a mortgage refinance in 3 minutes with Credible now >>

Who gets the dog in a divorce? 

Legally animals, including dogs, cats and other pets, are property. Following a divorce, the pet belongs to either one spouse or the other. Traditionally, there is no “custody” of pets.

There is, however, a recent trend in courts to view pets as more than property. In Illinois, Alaska, and California, divorce courts consider the best interests of the pet. If one spouse bought a pet, got married, and let the other spouse take care of the pet, then the other spouse could make a legal argument in those states that the pet is their joint property. 

But for now, in most states, pet ownership is dictated by simpler property laws. Pets are given to the spouse who paid for or adopted the pet. If the pet was paid for with joint funds, then the spouse who initiated the purchase receives the pet.

In community property states, if your pet cannot be considered separate property, you may still have a few options for maintaining a relationship with the pet. It is possible to co-own a pet, and you can draft provisions dictating the sharing of expenses related to its care as well as a visitation schedule  You can also try to obtain full ownership of the pet by giving up other property in exchange.Anything is negotiable.

Who owns the engagement and wedding rings in a divorce?

The spouse who receives the engagement ring keeps it after a divorce. The same goes for wedding rings and wedding bands in a divorce. Rings are gifts given before the start of a marriage, so they are considered separate property and not divisible.

However, wedding rings, as well as gifts of fine jewelry like necklaces, bracelets, cocktail rings, fine watches and timepieces bought during the marriage are marital property — even if they were gifts for anniversaries, birthdays or Christmas or other holidays.

Therefore, other jewelry purchased during the marriage and after the wedding, is considered a marital asset and subject to division of assets

What should I ask for in a divorce settlement?

The adage “If you don’t ask, you don’t get” applies to your divorce settlement. If you neglect to ask for what you want while negotiating, you may never have the chance. Although you can go back to court post-judgment, it’s a much safer bet, not to mention less expensive, to make your divorce agreement as inclusive as possible from the get-go.

Here are the top points to negotiate in your divorce:

  • Time sharing and legal decisions for any children you have
  • The home, or other real estate
  • Any child support or cost sharing
  • Retirement and other investments
  • Health insurance coverage
  • Ownership of any cars or vehicles
  • Ongoing mediation or therapy for the whole family [Best online therapy sites for moms]

In states with no-fault divorce laws, you’ll be entitled to equitable distribution. That means either the fair amount of marital property you acquired during the marriage or half of the community property acquired during the marriage, depending on your state. You may also be entitled to child support, typically calculated according to a simple formula. These are the biggies. Others are not necessarily obvious, so think about what your expenses are today and what they will be down the road, then speak up. 

What to do with a house after divorce?

As much as you may love your home with all its charm and memories, you may want to consider selling it. 

Why you should stay:

  • You can afford it on your own, without relying on spousal support.
  • You stand to lose a lot of money if you walk away. 
  • It’s a good investment. 
  • Tax benefits.
  • Emotionally, keeping the house makes sense (for you and your kids). 

Why you should sell your house in a divorce: 

  • You can’t afford it.
  • Selling your house will help you move on.
  • Starting fresh is empowering.
  • You want to set a good financial example for your kids by being fiscally responsible. 
  • You want to show your kids what it means to be resilient. Change is good! Living within your means is even better!

One way to keep the house if you cannot afford to buy it from your spouse is with a cash-out refinance. A cash-out refinance is when you apply for a new mortgage that is more than what you owe. The extra money is then used to buy the other’s share, leaving you the sole owner.  

What to do with an engagement ring after divorce?

An engagement ring is a promise made in anticipation of marriage. Once you marry, the ring becomes your personal property and what you do with it, even in the event of a divorce, is up to you. You can hold onto the ring for your children for when they get married (though, trust me: they don't want it), repurpose it into a new piece of jewelry, sell it, or auction it. You can then use the proceeds for divorce expenses, to invest in a new home or career, go on vacation, or get any number of other positive starts to your new life.

Should I sell my wedding ring before or after the divorce?

That said, if you can wait, I recommend selling your engagement ring after your divorce becomes final. First, selling it can incite animosity from your spouse, making a high-conflict divorce worse. Second, ownership may be contested in court if the marriage was short-lived or if the engagement ring is a family heirloom.

How to sell an engagement ring or wedding ring after divorce?

CashforGoldUSA buys gold, silver, and diamonds. The company appraises each piece and will pay you in 24 hours, and is a great, fast and reputable way to sell lower-end jewelry worth $1,200 or less. CashforGoldUSA has a B+ BBB rating, and was found by Fox News to pay out three-times its competitors for mail-in gold sales.

Worthy is a unique and trusted online marketplace for fine diamonds, bracelets, Tiffany jewelry, engagement rings, watches and timepieces, earrings and more. Worthy streamlines the auction process to provide buyers and sellers with a safe experience, and guarantees you receive the highest price possible for your item.

Each item sold at Worthy receives a free GIA or IGI certification, the most trusted and recognized evaluation in the world. This expert grading report to ensure accurate valuation before going to auction, ensuring you receive the highest possible price for your jewelry.

Learn more about how Worthy works in this post, or get a fast, free estimate on their site now.

Legal Disclaimer: This article is intended for informational purposes only and should not be relied upon as legal advice on any subject matter. Consult with an attorney for more information regarding your individual situation.

About Stacey Freeman

Stacey Freeman has been published in The Washington Post, Entrepreneur, Good Housekeeping, Cosmopolitan, Woman’s Day, Town & Country, Yahoo!, HuffPost, Popsugar and Worthy. She has been quoted in The New York Times, HuffPost, and SheKnows, to name a few. She is also a single mom of three amazing kids. For more information about Stacey, visit www.writeontrackllc.com.

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